The Central Bank of Lebanon has announced a 90 percent devaluation of the Lebanese pound. Has Bitcoin’s Time Really Arrived?
Lebanese Central Bank Governor Riyad Salameh announced on Tuesday that the new official exchange rate for the Lebanese pound (LBP) is 15,000 pounds per US dollar, effective February 1.
This is a 90 percent drop from the official rate that has been in place for the past 25 years. However, according to a Article According to Reuters, this devaluation still does not come close to matching the unofficial rate on the “parallel market” of 57,000 pounds per US dollar.
The Reuters article only discussed the impact of the devaluation of commercial banks. Salameh was quoted as saying that to account for the impact, banks would be given 5 years to “restructure losses due to devaluation”.
The IMF, like a barge circling its prey, has asked Lebanese authorities to deal with only $70 billion in financial sector losses. The Lebanese ruling elite is currently in talks with the IMF for a $3 billion bailout. It is anyone’s guess how much pain it will take to swing the deal on the Lebanese people.
The Lebanese people already face the imposition of bank withdrawal controls, severely restricting their ability to withdraw their own money from banks in order to survive.
Before people realize that the traditional monetary system is deeply, deeply flawed and established in a way that takes away their wealth and hands it over to the ruling class, one has to think about how much economic pain it will have to suffer.
One of the mantras of central bankers is that 2% inflation is what we all need, and they predictably engineer all their rate hikes and cuts to hit very close to that figure.
Of course, the basket of goods used to measure inflation can never be trusted to prevent prices from rising. So over the years, central bankers have been pulling out volatile items from the basket and putting in new ones whose prices don’t rise as fast.
website”http://www.shadowstats.com/A good resource is to track how inflation statistics have been manipulated in this way over several decades.
Another food for thought is whether central banks are able to keep inflation at 2%. 2% annual inflation over the lifetime of a generation is enough to steal 50% of his entire wealth.
In the current crypto bear market, Bitcoin lost more than 77% of its value. Given its recent recovery, it has fallen to 66%. If Bitcoin were to fall again and possibly go as low as $10,000, the potential upside of a new bull market could make it a very interesting alternative to putting fiat currency in the bank.
Of course, this is very debatable, but certainly an increase in the store of value that is completely outside the traditional monetary system, the 100% certainty of a fat currency trending to zero can be preferred.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.